The International Sustainability Standards Board (ISSB) has confirmed it will issue its first reporting standards at the end of Q2 2023.
The decision, which the ISSB defined as ‘unanimously approved’, was announced during the IFRS Sustainability Symposium in Montreal this week.
The ISSB has been reviewing feedback on two draft standards since its launch in November 2021: Exposure Draft IFRS S1 – General Requirements for Disclosure, and Exposure Draft IFRS S2 Climate-related Disclosures.
In an official statement, the IFRS says the ISSB has agreed for IFRS S1 and IFRS S2 to be effective from January 2024. This means businesses would collect sustainability disclosure information for the 2024 reporting cycle and publish reports in 2025.
In an attempt to reassure companies worldwide, the ISSB says it understands sustainability disclosures are new for many companies around the world and it will introduce programs to support those applying its standards. It adds that the unanimous decision is due to the strong demand from investors for companies to disclose sustainability-related data and information.
Fulfilling the global baseline
ISSB chair Emmanuel Faber says: ‘We responded to the capital market and G20 demand for a common language of investor-focused, sustainability-related disclosure, working diligently to deliver standards that fulfil the global baseline. Setting a 2024 effective date is consistent with this demand.’
Faber says the ISSB will work with regulators around the world ‘as they play their part, creating the conditions within their markets for adoption so that investors can use comparable information about sustainability-related risks and opportunities in their investment decisions without delay.’
The ISSB’s reporting standards set a baseline level of disclosure to meet the market’s needs. Individual countries’ accounting standards boards and other regulators can then adapt the standards to their own jurisdiction's requirements.
‘We will also actively engage with the many preparers who are considering voluntary adoption of S1 and S2, to better answer their investor needs,’ Faber says. ‘As requested by our stakeholders, we have built from existing market-accepted frameworks and standards. This means the thousands of companies already using the TCFD recommendations and SASB Standards will be in a strong position to use S1 and S2.’